WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A007800020001-6
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 46
• Document Creation Date: December 22, 2016
• Document Release Date: October 2, 2008
• Sequence Number: 1
• Publication Date: March 27, 1970
• Content Type: SUMMARY

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~c~~ ~t
DIRECTORATE OF
INTELLIGENCE
WEEKLY SUMMARY
Secret
State Dept. review
` "
completed '" ''
27 March 1970
No. 0363/70
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(Information as of noon EST, 26 March 1970)
VIETNAM
The events of the past few weeks in Phnom Penh have
endangered the security of Communist base areas and
logistics networks in Cambodia, thus adding still
another dimension to the mounting difficulties fac-
ing the enemy's war effort in South Vietnam. The
South Vietnamese Government, meanwhile, is generally
adopting a restrained attitude toward events in Cam-
bodia, although it is obviously pleased at the pros-
pect of a more anti-Communist leadership in Phnom
Penh.
HANOI BACKS SIHANOUK AGAINST CAMBODIAN REGIME
Sihanouk has decided, with firm support from North
Vietnam, to try actively to undermine the Cambodian
regime.
.CHINESE REMAIN QUIET BUT PRODUCTIVE IN BLACK AFRICA
Peking has continued over the past year to devote
considerable attention to improving China's position
in certain African states.
PHILIPPINE STUDENTS PUSH POPULAR GRIEVANCES
To keep up the pressure on Marcos, student agitators
have identified with popular dissatisfaction over
mounting living costs; if moderate students succeed
in muting the recent violence, they could attract the
wide popular support they have been lacking.
TAIPEI WORRIES ABOUT ITS INTERNATIONAL POSITION
The Nationalist Chinese are becoming more deeply con-
cerned about their international standing, particu-
larly as regards the UN and the future of US support
for Taipei, as the Sino-US talks wear on and other
countries make overtures to Communist China.-
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Europe
ITALY'S CABINET CRISIS EASING
Christian Democrat Mariano Rumor is apparently suc-
ceeding in Y~is effort to form a new center-left
coalition.
BONN SEEKS TO BROADEN TRADE TIES WITH EASTERN EUROPE
Bonn is continuing its efforts to increase trade
ties with Eastern European countries despite falter-
ing negotiations with Warsaw on a long-term trade
agreement.
SOVIETS MOVE TO SLOW EUROPEAN ECONOMIC INTEGRATION
The Soviets are worried by recent Western European
moves in the direction of economic union because of
their fear that a confederated and strengthened
Europe would harm Soviet political and economic
interests.
ALBANIAN INITIATIVE TOWARD EUROPE
Tirana may establish ties with several NATO countries
as Albania continues to move out of isolation.
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Middle East - Africa
REACTION TO DECISION ON ISRAEL?S REQUEST FOR PLANES
Arab public media greeted the US response to Israel's
request for more aircraft with suspicion and hostility,
and official reaction was only slightly less negative.
Israeli and Soviet reactions were restrained.
CONGO (BRAZZAVILLE) REGIME FOILS ANOTHER COUP ATTEMPT
This week's abortive coup probably will further
strengthen the position of leftist extremists in
President Ngouabi's regime and discourage other dis-
sidents at least temporarily from staging another
attempt.
BOTH SIDES REMAIN WARY IN JORDAN-FEDAYEEN DISPUTE
Palestinian commando groups continue to prepare for
the possibility of another showdown with King Husayn.
The King is talking about forming a stronger cabinet
as the key to dealing effectively with the fedayeen
problem.
ARAB OIL CONFERENCE ENDS ON MODERATE NOTE
The Arab Petroleum Congress, meeting in Kuwait this
week, wound up with a series of moderate resolutions
calling for closer cooperation between the oil com-
panies and the states in which they operate.
TWO OF INDIA'S STATE GOVERNMENTS FALL
Political instability continues to plague state gov-
ernments.
THE SOMALI REVOLUTION CREAKS ALONG
The Supreme Revolutionary Council has produced meager
results in its attempts to act on the numerous prob-
lems it inherited following the coup of October 1969.
The regime has failed to win significant popular sup-
port, and discontent has grown throughout the country.
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Western Hemisphere
KIDNAPING OF US ATTACHE WILL ADD TO DOMINICAN UNREST
The kidnaping of the US air attache on Tuesday will
aggravate the public order problems the government
already facers during this pare-election period.
EL SALVADOR - HONDURAS DEADLOCK CONTINUES
Continuing border incidents and the inability of both
countries to reach final agreement on the establish-
ment of a demilitarized zone have stalemated bi-
lateral talks .
VENEZUELA'S PRESIDENT CALDERA--A YEAR OF FRUSTRATION
President Caldera's second year promises to be more
fruitful than his first, but he still faces many
serious difficulties.
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The Vietnamese Communists, faced with a hostile Cambodian Govern-
ment that is rapidly consolidating its control, are determined through
intimidation, by bluster and if necessary by force, to preserve their bases
along the Cambodian border. Prince Sihanouk himself, unwilling to give up
the country he .personally guided to independence amidst the conflicting
interests of Western and Communist powers in Indo-China, has thrown in
with the Communists as the only means he secs of regaining power. His new
comrades hope that his announced formation of a "national liberation
army," together with the prospect of serious battle with North Vietnamese
regulars, will force Phnom Penh to accommodate itself to Communist use of
Cambodian territory for sanctuary, infiltration, and resupply.
Student agitation in the Philippines last week concentrated on exploit-
ing the rising cost of living, an issue on which the government is especially
vulnerable. Student agitators protested a 50-percent rise in bus fares by
stoning buses and government vehicles. Many students, however, are preoc-
cupied with examinations, and upcoming holidays could slow things down
until July. Moderate students hope to use the holidays for organization and
to win wider popular support; the public generally opposes the violence that
has dominated student demonstrations thus far. With stronger popular back-
ing, the students would be able to increase significantly the pressures on
President Marcos.
President Suharto of Indonesia paid a three-day state visit to Malaysia
last week, in return for Malaysian Premier Rahman's 1968 visit. To further
cement the good relations that have existed since the confrontation period
ended in mid-1966, the two countries signed a Treaty of Friendship and
concluded a territorial waters agreement that has been in the works for some
months. The Malaysians went all out to make Suharto's visit a success. Both
the Chinese community in Malaysia and Chinese-dominated Singapore, how-
ever, are probably uneasy over the increasingly friendly association between
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VIETNAM
Sanctuary in Je:o and
Recent events in Cambodia
have added a new dimension to
the difficulties facing the Com-
munists' war effort in South Viet-
nam. In short, they have jeop-
ardized the security of Communist
base areas along the Cambodian -
South Vietnamese border and have
endangered enemy supply lines
Page 2
through Cambodia to forces in the
III and IV Corps areas.
The Communists are clearly
apprehensive over the possibility
of Cambodian - South Vietnamese
collusion in operations against
their border sanctuaries, par-
ticularly those straddling the
southern part of South Vietnam.
These fears were realized on 20
March when three battalions of
South Vietnamese rangers, with
armor and air support, raided
the base camp of the North Viet-
namese 88th Regiment just over
the Cambodian border opposite
Kien Tuong Province. Nearly 100
Communist regulars were killed
in contrast with South Vietnam-
ese losses of 22 killed and 16
wounded. The operation will no
doubt compound the problems the
88th has encountered since No-
vember in its attempts to infil-
trate from Cambodia across the
Plain of Reeds into a major delta
base area near My Tho. Hanoi is
probably worried about the possi-
bility of similar operations
against several other North Viet-
namese regiments that are cur-
rently strung out along the delta's
western border with Cambodia.
Although the Cambodians them-
selves have thus far avoided major
clashes with Communist units,
they have strengthened their
military forces along several
key stretches of the border with
South Vietnam. The Communists
have generally elected to hold
their ground and forgo, at least
for the time being, any wholesale
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movement of their bases and troops
Saigon Plays It Cool
The Saigon government is
generally adopting a restrained
attitude toward events in Cam-
bodia, even though the South Viet-
namese are obviously pleased at
the prospect of a more anti-
communist leadership in Phnom
Penh. The Foreign Ministry has
provided guidance to all South
Vietnamese diplomatic missions
to take a low-key approach to the
problem, presumably to avoid jeop-
ardizing a trend that can only
help the South Vietnamese war ef-
fort by hindering that of the Com-
munists.
in the event of
point Ca o ian - allied opera-
tions in the Mimot area, the Com-
munists will relocate their head-
quarters to central Vietnam some-
where along the Laotian - South
Vietnamese border.
The Communists are probably
disturbed over the prospect of
serious disruptions to their lo-
gistic networks that pass through
Cambodia. The new regime in
Phnom Penh has suspended all
existing trade agreements with
the Viet Cong, thus cutting off
legal supply channels to the Com-
munists. Furthermore, clandestine
smuggling operations probably
have been affected by increased
security measures as well as by
Cambodian troop movements in the
vicinity of enemy border base
areas--the terminal point of Com-
munist supply operations in Cam-
bodia. Communist forces in III
and IV Corps would be hardest hit
by any prolonged disruption of
supply lines through Cambodia.
Farther north, Communist
units in the western highlands
of II Corps evidently have al-
ready experienced serious logis-
tics problems because of Cambod-
ian restrictions on su 1 move-
ments.
President Th~eu privately has
expressed some cautiously opti-
mistic views on the prospects in
Cambodia. He noted that the cur-
rent leaders in Phnom Penh will
probably face grave difficulties
if Sihanouk launches a Communist-
backed resistance movement, largely
because they cannot count on di-
rect US support. Thieu speculated
that Hanoi might find it neces-
sary to engage in serious negotia-
tions if the current Cambodian
regime can stay in control and
cut off supply lines to the Com-
munists through Cambodia.
Student Unrest
Student groups at Saigon
University continued their pro-
tests this week against the ar- 25X1
rest of several student leaders
on charges of being Viet Cong
agents. The students are demand-
ing that the government release
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s~cxr.z,
the arrested leaders, but they
reportedly hope to avoid violent
confrontations with the police.
A number of sympathetic groups
in Saigon supporting the students'
demands include a Buddhist or-
ganization and the press "strug-
gle committee," which successfully
challenged the government's at-
tempt to increase taxes on im-
ported newsprint earlier this
month. In addition, several
Lower House deputies have asked
that the government :submit an
official report on the arrests
to the National Assembly, and
have called for a Lower House
session to discuss tYie matter.
The students and their sup-
porters were unmoved by police
explanations for the arrests at
a press conference last weekend.
Police officials said that a
total of 40 students had been ar-
rested, all of whom were charged
with belonging to a 'diet Cong stu-
dent association. The Saigon
police chief claimed that the ar-
rested students' aims were to
agitate for a coalition govern-
ment, turn other students against
the government, infiltrate legiti-
~ mate groups, and assassinate anti-
; Communist groups.
Land Reform Law Promulgated
President Thieu promulgated
the land-reform law during a spe-
cial national holiday called on
26 March to celebrate the occa-
sion. The President plans to
conduct a two-month propaganda
campaign throughout the country
to spread the word about land
reform. In a gesture to improve
relations with the legislature,
Thieu has made an effort to give
the Assembly as much credit as
possible for its role in passing
the law.
Thieu clearly hopes that a
new land-reform program will in-
crease support for the govern-
ment in the countryside. Taken
together with other government
programs aimed at improving con-
ditions in the provinces, land
reform may eventually create some
new support, but this will de-
pend on how the program is ac-
tually implemented.
S}'.~,}Z~',~1~
Pale 4 WEEKLY SUAIMAHY 27 Mar 70
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HANOI BACKS SIHANOUK AGAINST CAMBODIAN REGIME
Sihanouk has indicated that
he will try to wage an active
campaign to bring down the Lon
Nol government, specifically
through the formation of a "gov-
ernment of national unity" and a
"national liberation army." In
his appeal issued in Peking on
23 March to the Cambodian people
to rally to his "liberation move-
ment," Sihanouk promised that his
followers would receive arms, am-
munition, and training to enable
them to overthrow the government.
He also stated that socialist
countries would lend "formal sup-
port" to this effort, which he
implied would be carried out in
cooperation with Communist forces.
Sihanouk's appeal of 23 March
probably was cleared with North
Vietnamese Prime Minister Ph am
Van Dong, who was in Peking at
that time. Moreover, an offi-
cial statement by Hanoi on 25
March firmly endorsed Sihanouk's
plans, indicating that the Viet-
namese Conununists are prepared
to tighten the screws on Phnom
Penh. As further proof of this
intention, the Vietnamese Commu-
nists are withdrawing most of
their diplomatic personnel from
Phnom Penh.
At a minimum, Hanoi probably
hopes that its support for Siha-
nouk will foster doubt among
Page 5
the new government's supporters
and thereby shake the resolve of
its leaders. The declaration
of support was so strong and un-
ambiguous, however, as to con-
note a willingness to back Siha-
nouk with some kind of military
action if it is required to re-
verse recent events in Cambodia.
The government, for its part,
is continuing to consolidate its
power, and the army has been or-
dered to crush any action by Siha-
nouk to resume power. The gov-
ernment also has suspended cer-
tain constitutional freedoms for
six months and is removing ac-
tual or suspect followers of Siha-
nouk from positions of responsi-
bility. In addition it is deni-
grating Sihanouk and his entourage,
thus reducing prospects for a fu-
ture accommodation with the Prince.
Phnom Penh has also shown
signs of adopting a more sober ap-
proach to its most pressing prob-
lem by relaxing somewhat its in-
sistence on the withdrawal of Viet-
namese Communist troops. It has
called for "official negotiations"
with the Communists to "demand" a
pull-out, and also has asked the
Geneva co-chairmen to "reconstitute"
the moribund International Con-
trol Commission to meet the threat
of forei n troops on Cambodian
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CHINESE REMAIN QUIET BUT PRODUCTIVE IN BLACK AFRICA
Peking, despite its preoc-
cupation with more pressing for-
eign and domestic pY?oblems, has
continued over the ~>ast year to
devote considerable attention to
improving its position in certain
African states. In recent weeks,
the Chinese have entertained a
high-ranking emissary from Congo
(Brazzaville), renewed a several-
million - dollar, interest-free
credit with the sem~_autonomous
Zanzibar government in Tanzania,
and delivered a shi~~ment of mili-
tary vehicles and small arms to
Guinea.
This activity _i.s the latest
reflection of Peking's low-keyed
and conventional diplomatic ef-
fort in black Afric,s.--one of the
few bright spots in the largely
bleak context of Chinese foreign
affairs. The Chinese, in general,
have abandoned their unproductive,
blatant attempts of the early and
mid-1960s to instigate radical-
led revolution and subversion
throughout Africa in favor of a
more realistic approach to polit-
Countries which recognize
Communist China
ical conditions across the African
continent. This has led Peking
to develop cordial relations with
several black African governments,
particularly those that are not
overly dependent on the West or
on the USSR, that pursue a rela-
tively militant foreign policy
line, and that are willing to
permit a substantial Chinese pres-
ence in their countries.
Peking generally did not al-
low the "Red Guard diplomacy" of
1966-67 to jeopardize its devel-
oping relations with these states
and has continued to give high
priority to its diplomatic efforts
in this area. Last May, for ex-
ample, Chairman Mao, in an unusual
personal appearance, formally
greeted the ambassadors to China
from Peking's foremost "African
friends"--Tanzania, Guinea, Congo
(B), and Zambia. Over one third
of China's new ambassadorial
corps sent out following the dip-
lomatic hiatus during the Cul-
tural Revolution were posted to
African states, and a number of
African dignitaries were given
a particularly warm welcome by
Mao and other Chinese leaders
during Peking's National Day cere-
monies last October.
Meanwhile, the Chinese aid
effort in Africa is moving along
steadily. A high-ranking Chinese
delegation that visited Tanzania
and Zambia late last year reaf-
firmed China's commitment to con-
struct and finance the 1,200-mile
TanZam railroad--Peking's largest
single aid project in the non-
communist world. More recently,
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the Chinese agreed to undertake an-
other railway project--the rehabili-
tation of a major portion of the
450-mile Conakry-Kankan link in
Guinea.
In the realm of military assist-
ance, Peking has become the chief
supplier of arms, equipment, and
training to Tanzania's security
forces, Chinese success there was
underscored by the departure around
the turn of the year of Canadian and
Soviet military advisers.
e C inese have also continued
their low-level military aid to a
few African insurgency groups op-
erating against white minority gov-
ernments. This effort is designed
in large part to win the confidence
of those African states that are
strongly committed to black self-
determination--most notabl Tan-
zania and Zambia.
PHILIPPINE STUDENTS PUSH POPULAR GRIEVANCES
Student agitators have seized
the issue of rapidly rising living
costs to maintain pressure against
the government. On 23 and 24 March,
students in Manila disrupted traffic
by stoning buses and government ve-
hicles to protest a 50-percent rise
in bus fares, the latest boost in
the spiraling inflation triggered by
last month's peso devaluation. Their
protest probably will not win much
immediate public support because of
their continued resort to violence.
In time, however, with a sustained
and less violent campaign against
these popular grievances, the stu-
dents could win much wider support
and significantly increase the pres-
sure on President Marcos.
Recent demonstrations have not
attracted large numbers partly be-
cause the students are preparing for
final examinations. More students
will be free for street action, how-
ever, after schools close for annual
vacations in a few weeks. Many will
go home to the provinces, but the
militant core of agitators will re-
main on the scene.
Student leaders plan to tighten
their organization during the vaca-
tion period. Those who return to
their homes outside Manila will con-
duct "teach-ins" to win wider popu-
lar support and to erase the image
of violence that the public pres-
ently has as a result of the recent
(demonstrations. Students may be in
a position to push their grievances
more effectively when the new school
year begins in July. Continued
rises in the cost of living should
provide moderate student leaders
who until now have been overshad-
owed by violence-prone radicals,
with an issue they could push re-
sponsibly to gain the substantial
public support vital to their cause,
President Marcos, however,
rather than trying to meet public
dissatisfaction with specific steps
to ease the economic situation,
might turn to drastic measures such
as the imposition of martial law.
He remarked last weekend that the
possibility of a "confrontation"
with domestic Communists could ne-
cessitate emergency measures. This
step would not only solidify popu-
lar opposition to him, but would
also weaken support from the non-
political military, which has been
the principal moderating influence
on him in the current crisis.
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TAI-PEI WORRIES ABOUT ITS If~lTERNATIONAL POSITION
The enunciation of the Nixon
Dor_trine last July, together with
the beginning of US disengagement
from Vietnam, generated much ap-
prehension in the Nationalist
Chinese leadership about the fu-
ture of US diplomatic and politi-
cal support. These fears now ap-
pear to have crystallized as Tai-
pei has been faced with a series
of what it considers the first
concrete manifestations of this
new and, for it, ominous turn in
Washington's Asian policy.
The most damaging develop-
ment, from the Nationalist view-
point, has been the resumption
of the Sino-US talks in Warsaw.
Taipei has opposed these sessions
since their inception in 1955,
considering them tantamount to
an open American policy of "two
Chinas." The Nationalists, how-
ever, clearly regard the current
series of meetings as a far more
serious matter than those in the
past, when the talks took place
against a background of impasse
and mounting US military involve-
ment in Asia. Already disturbed
by Canadian and Italian political
overtures to Peking and signs of
slippage in its position in the
United Nations, Taipei probably
judges that almost any sign of
significant progress at Warsaw
will lead to a substantial ero-
sion of its diplomatic position
and sharply discredit its claim
to represent all CYiina, a posi-
tion the regime ha~~ used to jus-
tify its 20-year monopoly of po-
litical power on the island.
Despite continuing signs of
pessimism and dismay at the high-
est levels of the Nationalist gov-
ernment, however, Taipei thus far
has stopped short of a blatant
public display of pique toward
Washington.
Its response to the US to
date has consisted of predictable
expressions of concern through dip-
lomatic channels, muffled refer-
ences in the local press to US
"appeasement," and official ef-
forts to coax the US to acknowl-
edge its political and military
commitments to Taiwan. During
the past week, for example, Tai-
pei has focused its attention on
the motion now before the US Sen-
ate to repeal the .1955 "Formosa
Resolution." Nationalist Foreign
Minister Wei, in a conversation
with the US ambassador in Taipei,
expressed concern over the Nixon
administration's failure to oppose
the motion, implying that Taipei
views the matter as a possible
first step toward US cancellation
of its commitment to Taiwan. Wei
then requested written assurances
that its repeal would not affect
US defense obligations. He also
asked Washington to do what it
could to minimize publicity on the
Senate proceeding, out of defer-
ence to the Nationalist govern-
ment's "internal problems"--a re-
vealing indication of the leader-
ship's feaY~ that an international
setback will adversely affect the
morale of the political and mili-
tary establishment in Taiwan.
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four-power talks on the status of Berlin began on the 26th with Soviet
Ambassador to East Germany Abrasirnov speaking for Moscow. Presumably,
the Soviets will be chiefly interested in reducing Bonn's official presence in
West Berlin and in gaining for themselves a share of responsibility for the
affairs of the city.
On 19 March Moscow issued the most authoritative indictment of
China since the Peking talks began. An article irr Pravda puts the Chinese on
notice that Soviet patience in the stalemated discussions is almost exhausted.
The Chinese have not responded to the article and continue a standdown on
anti-Soviet polemics.
Moscow is evidently waiting for the dust to settle in Cambodia before
moving forcefully in that situation. The Soviets are dealing with the new
government, but they have also publicized Sihanouk's call for International
Control Commission supervision of a nationwide referendum. Moscow has
been silent, however, on Sihanouk's statement in Peking that suggested the
deposed leader might set up a national liberation movement in exile.
Budapest announced a sizable amnesty that includes provisions for
reconciliation with many of its defectors in the West. The amnesty is part of
the regime's efforts to gain the support of Hungarians at home and abroad
for the current festive year, which combines both the anniversary of the
Soviet liberation and the Christian millennium.
Romanian leader Ceausescu this week sharply attacked all levels of the
agriculture sector for failing to meet the needs of the economy. In a report
to a party central committee plenum, Ceausescu admitted the regime's
neglect of agriculture but demanded better performance for the 1970s. The
mediocre agricultural year in 1969 caused domestic shortages and reportedly
produced widespread criticism of the regime's policies, and perhaps of
Ceausescu himself. Several high-level government officials have lost their jobs
as the first step. toward rectifying the situation.
The INTELSAT conference recessed on 20 March, having reached
agreement on the principles of a compromise on the divisive issue of how the
organization should be managed_ A working group will meet in May to draw
up a draft text, and the conference itself may reconvene in Septem-
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ITALY~S CABINET CRISIS EASING
Prime Minister ?- designate
Mariano Rumor's success in secur-
ing the backing of t'he Christian
Democrats, the Socialists, the
Unitary Socialists, and the Re-
pub licans makes it likely that
he wi 11 be able to f orm a new
center-left government, thus end-
ing the cabinet crisis that began
on 6 February. The earlier ef-
forts of Aldo Moro and Amintore
Fanfani to form a new government
were unsuccessful but served to
ease Rumor's task.
Bargaining is n.ow under way
over the allocation of ministe-
rial and other posts.. Christian
Democrat Moro and Socialist Pi-
etro Nenni seem to be the leading
contenders for the Foreign Min-
istry. Both have previous exper-
ience in the post acid it is not
likely that either would initiate
any major change in Italian for-
eign policy.
The establishmE;nt of a new
government without resort to na-
tional elections will permit
parliament to continue work on
partially enacted economic, ad-
ministrative, and social reforms.
The mast important bills now in
process are those. legalizing di-
vorce, reforming the tax struc-
ture, decentralizing some govern-
ment institutions, and reforming
the state universities. New
elections would have wiped out
most of the work done on these
bills by the present parliament,
whose normal term would run until
1973.
Regional and local elections
now are expected to be set for
late spring. Every Italian
party--but particularly govern-
ment parties and their chief
opponent, the Communist Party--
will seek to exceed past records
in these elections to strengthen
their respective claims to a
voice in government. During the
recent weeks of crisis, the Com-
munists have favored a two-party
government coalition of Christian
Democrats and Socialists rather
than the projected reconstitution
of the four-party, center-left
coalition. The Communist Party
is probably relatively well sat-
isfied with its immediate pros-
pects, however, inasmuch as the
tentatively scheduled regional
elections are likely to result
in Communist-dominated govern-
ments in Tuscany and Emilia Ro-
magna, and perhaps also in Umbria.
On the economic front, the
chief concern of a new Rumor
government would center on the
threat of too rapid an increase
in domestic prices and the need
to control an outflow of capital.
Favorable economic factors are
the marked decrease in strikes
and the resurgence of industrial
production in the early part of
the year.
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BONN SEEKS TO BROADEN TRADE TIES WITH EASTERN EUROPE
In spite of faltering nego- In response, the Poles stiff-
tiations with Warsaw on a long- ened their position on some trade
term trade agreement, Bonn con- issues. They demanded increased
tinues to seek broader trade op-
portunities there and with other
Eastern European countries. The
recent trip to Warsaw by two sen-
ior West German officials appar-
ently was designed to convey Ch an-
cellor Brandt's continuing desire
for a long-term economic agreement
with Poland. Bonn failed to of-
fer any significant new economic
concessions, however, and all that
resulted was a finalizing of com-
modity trade lists for 1970. The
protocol for this trade, expected
to be signed this week, will in-
clude some $20 million worth of
quota increases granted by Bonn
last year, as well as additional
increases for 1970 amounting to
some $14 million.
The chief of Bonn's trade
mission in Warsaw says the Poles
cannot expect to obtain preferen-
tial interest rates on German
credits, but must .accept current
commercial rates. He stated .that
Bonn could provide some $120 mil-
lion in credits this year, and
might consider upping them to
$550-800 million over a five-year
period. At current high interest
rates, ..however, Warsaw would be
unlikely to use this amount of
credit. Bonn also continues to
resist Polish efforts to eliminate
a11,German quotas from any long-
term agreements, while at the same
time considering increased quotas
.only for Polish manufactured goods
produced by their joint ventures.
1 German quotas and reduced duties
{ for Polish manufactured goods. They
also withdrew their earlier agree-
" ment to recognize West'Berlin as
part of the area covered by the
prospective long-term economic
agreement. A German official be-
lieves this latest Polish tactic
may be related to the political
talks between the two countries
as well as to hopes of eventually
wresting greater economic conces-
sions from Bonn. No date was set
for the resumption of the trade
talks and they could be delayed
by similar talks with Hungary.
scheduled to begin in Bonn on 6
April. Annual trade negotiations
with Czechoslovakia and Bulgaria
are also planned.
i The visit of Hungarian Foreign
Trade Minister Biro last week set
the stage for detailed negotiations
for a long-term trade agreement and
possible technical cooperation.
Bonn, during a-late February
visit by Romania's foreign trade
minister agreed in principle to
guarantee private untied credits
of $27 million to Bucharest, The
trade minister, however, was dis-
mayed at the high interest rates,
and Romania may not take up the of-
fer at this time.. Bonn's willing-
ness to guarantee credits not ear-
marked .for any particular use, how-
ever, confirms its desire to open
the West German capital market to
East European countries,
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SOVIETS MOVE TO SLOW EUROPEAN ECONOMIC INTEGRATION
Soviet hostility toward
Western European unity is undi-
minished. Moscow had been rela-
tively quiet on this issue until
fairly recently, probably because
it wished to avoid provoking any
quarrels that might complicate
its pursuit of East-West detente
on other diplomatic fronts. Re-
newed movement toward enlargement
and strengthening of the European
Communities (EC) has apparently,
convinced the Soviets, however,
that further silence and inactiv-
ity might prove costly to their
long-term interests in Europe.
Moscow has been particularly
disturbed by progress toward nego-
tiating with the UK on membership
and by the decision to grant lim-
ited budgetary power to the Euro-
pean Parliament in 19.75. It fears
that the EC is on the verge of a
new expansion and accretion of
strength. Since the turn of the
year, the EC has been the subject
of violent attacks in the Soviet
press. Economically, it is criti-
cized as a "closed economic group-
ing" that will bar the way to in-
creased East-West cooperation. Po-
litically, it is denounced as a
channel for American influence
in Europe or, alternatively, as
a cat's-paw for a resurgent Ger-
many.
Where it has been able to
do so, the Soviet Union has tried
to bar further coalescence around
the EC.= This was' clearly demon-
strated by Moscow's apparent ve-
toing of Finnish membership in
the nascent Nordic Economic Com-
munity (Nordee) only weeks before
a treaty establishing the organi-
zation was to have been signed.
Although the Finns officially deny
having been subjected to Soviet
pressure, they have announced that
they will not sign the Nordec
treaty.
Tlie Soviets have also been ac-
tive elsewhere. Several authorita-
tive articles in the Soviet press
over the past few weeks have warned
the neutral Austrians against form-
ing "any alliance" with the EC. The
USSR has made the pointed argument
that this would be contrary to the
State Treaty that established Aus-
tria's independence and its subse-
quent commitment to permanent neu-
trality. The Austrians profess to
believe that they still retain some
freedom of maneuver in the absence
of a formal Soviet pro-test, but
there is little reason to doubt that
Moscow would make such a protest if
it became. necessary.
Moscow's opposition is .based
both on its appreciation of ,the po-
tential weight of a united Western
Europe on the world balance of power
and on ,its fear that economic union
might limit Soviet access to-the
vital technological-and industrial
resourcesof Western Europe. This
fear is not likely to b'e eliminated
quickly.
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ALBANIAN INITIATIVE TOWARD EUROPE
The Hoxha regime has taken
a major step toward bringing Al-
bania into closer economic and
political contact with non-Com-
munist Europe. Albanian offi-
cials have recently approached
Denmark, Belgium, Norway, Greece,
and possibly the Netherlands
about establishing diplomatic
relations.
Initial response to the Al-
banian overture has been gener-
ally favorable, with Copenhagen
and Oslo the most receptive. Re-
sumption of Greek-Albanian rela-
tions is only a long-range pos-
sibility, however. Although
Greek-Albanian economic ties have
improved over the past year,
Greek claims to southern Albania
and the fact that the two are
still technically at war inhibit
any immediate political rapproche-
ment.
The demarche to these NATO
countries is a striking example
} of the Hoxha regime's policy of
resuming relations with foreign
countries as a means of gaining
greater political flexibility
and lessening dependence on dis-
tant Peking. Tirana began this
policy when the occupation of
Czechoslovakia raised fears over
Albania's vulnerability. Since
the events of August 1968, Tirana
has steadily moved out of its
largely self-imposed isolation.
Albanian action thus far has
not generated strains in the Sino-
Albanian axis; on the contrary,
its initiative may well comple-
ment the alliance by providing
Tirana with new platforms from
which to expound standard Sino-
Albanian propaganda. The new con-
tacts could also open up trade
that will hopefully satisfy some
of the country's growing economic25X1
needs, which are now almost en-
tirel met by Peking.
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Military activity continued at a fairl hi h level aloe the Arab-Israeli
cease-fire lines this week.
25X1
A series of largely accidental incidents between armed Palestinian
commandos, Lebanese villagers, and government security forces has again
threatened the delicate Christian-Muslim power balance in Lebanon. Tem-
pers are strained on both sides as the government seeks to mediate the
disputes.
Fatah leader Yasir Arafat arrived in Peking last weekend, presumably in
search of weapons and more formal political recognition for his fedayeen
group. The Chinese gave him a warm welcome and will probably offer
propaganda support and some arms.
The Iranian Government appears to be preparing the people for a
possible settlement of its claim to Bahrain through UN auspices. The press
has emphasized the Shah's williligness to respect the will of the people of
Bahrain, and newspapers in Tehran and London speculated that the UN had
already been asked to consult with the Bahrainis. Settlement of the Iranian
claim would remove another obstacle in the path of Arab-Iranian coopera-
tion in the Persian Gulf.
The institution of criminal proceedings by the Tunisian Government
against Ahmed Ben Salah, the discredited former economic chief who was
ousted from the government and the party last fall, seems almost certain to
embroil Prime Minister Ladgham in serious political controversy. Popular
confidence in Ladgham has already been eroded by his failure to move ahead
with essential economic and social programs.
The presidential election in Dahomey moves into its final stage this
weekend, and there are growing indications that the winner will be Hubert
Maga, a northerner who was the country's first president. With the increasing
amount of fraud, violence, and tribal frictions that have accompanied the
voting, however, the chances of military intervention have also in-
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REACTION TO DECISION ON ISRAEL'S REQUEST FOR PLANES
The reaction of Arab public
media to the US statement on its
decision to grant economic aid
but not to sell additional F-4
Phantoms and A-4 Skyhawks to
Israel was almost universally
negative.
Cairo radio described the
announcement as "an unskillful
piece of propaganda," and said
that the US decision lost even
its temporary value because of
Secretary Rogers' announcement
of financial aid to Israel and
a passage in the statement in-
terpreted by Cairo as promising
that the US would urgently supply
Israel with planes to replace
those it might lose. Al-Ahram
described Rogers' statement as
an unacceptable attempt to de-
ceive the Arab world. Other Egyp-
tian public media took the general
line that it was only a question
of time until the Israeli request
would be fulfilled.
Official reaction in Arab
capitals to the US decision was
mixed. Saudi Deputy Foreign
Minister Saqqaf called the deci-
sion "a great disappointment"
and said that the economic aid
to be given Israel was as criti-
cal to Israel's continued ability
to continue "aggression" as direct
arms support. Although Jordanian
Prime Minister Talhuni was said
to be clearly pleased by the de-
cision, his over-all reaction
was described as reserved and
"unadventuresome." Premier Karami
of Lebanon said the decision
contained a "positive aspect
which must be acknowledged," but
added that the decision to extend
economic aid did not inspire
confidence. Tunisian Foreign
Minister Bourguiba expressed.
~, appreciation for the "responsible
!~ and balanced" decision, and said
~!, he hoped the US would not be dis-
'; appointed by the reaction in cer-
tain Arab circles.
Baghdad's domestic radio
stated that there was nothing in
recent statements by President
Nixon to show a clear rejection
of "Zionist demands" and claimed
that the US "agrees to supply the
Zionists with more arms." A Da-
mascus domestic broadcast com-
mented that the US announcement
of financial assistance for Israel
surprised no one and. that the
postponement of a positive re-
sponse to the Israeli arms request
did not mean refusal.. The Beirut
press, although less extreme than
other Arab media, was for the most
part critical and included digs
at US policy in its coverage of
the story.
i Both public media and offi-
I cial Israeli reaction to the U5
decision was voiced in a tone of
restrained concern. The Israelis,
on the whole, appear to have
found Secretary Rogers' state-
ment less distasteful than many
of them had feared. Although
characterizing the decision as
a "policy mistake," they have
indicated at least a degree of
satisfaction with some aspects
of the statement, including the
promise of financial aid. The
semiofficial Davar reported that
the secretary's ~h nt" that the
US was prepared to furnish Israel
planes on short notice if circum-
stances so warranted was greeted
with satisfaction in Jerusalem.
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In contrast with the adverse
Arab reaction, Moscow responded
to the US decision with restraint.
The Soviets were preparing until
two weeks ago to slash away at
Washington for giving Israel
additional Phantoms. When it
became apparent, however, that
the response would probably be
negative, the Soviet press was
hard put to explain its earlier
predictions. As a result, Soviet
comment was unusually muddled,
with different articles and broad-
casts taking ..divergent lines as
to what had prompted the US stand.
Soviet propaganda was unanimous,
however, in charging that the de-
cision represented no shift in
Washington's unstinting support
for Israel. 25X1
CONGO BRAZZAVILLE) REGIME FOILS ANOTHER COUP ATTEMPT
President Ngouabi's govern-
ment remains in control follow-
ing the failure on 23 March of
a coup attempt by a small band
of Congo (Kinshasa) - based
exiles and a few coconspirators
in Brazzaville. For a while at
least, this incident will prob-
ably strengthen the position of
leftist-extremists in the regime
and discourage other dissidents
from staging another attempt.
The government was never
seriously threatened and its of-
ficials were never in the custody
of the coup group, which was made
up of tribal and ideological op-
ponents of the Ngouabi regime.
The group, led by Lt. Pierre
Kiganga, succeeded only in seiz-
ing control of the Brazzaville
radio station, which it held for
about two hours. Ngouabi, erst-
while commander of the Brazzaville
army's paracommando battalion, ap-
parently personally led the army's
suppression of the coup. Kiganga
and many of his followers were
killed. Despite probable sympathy
for the dissidents among elements
of the Brazzaville military, no
significant support for the coup
materialized.
While the plotters held
Radio Brazzaville, they pleaded
in vain for help from Kinshasa
and from other neighboring coun-
tries. Kinshasa did not have
an adequate military force poised
for immediate deployment across
the river at the time of the coup.
It remains doubtful whether Presi-
dent Mobutu intended to send
troops; perhaps he planned to do
so in the event that the plotters
were clearly gaining control.
Although the incident has
thrown Ngouabi and his extremist
partners closer together for the
time being, eventually it may sow
more discord between them. The
basic differences that exist be-
tween the opportunistic Ngouabi
and the Communist-oriented radi-
cals have not been altered. The
coalition may well be tested if
either side seems to be gaining
advantage from the episode itself
or from the increased security
measures or the trials and purges
that are sure to come.
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BOTH SIDES REMAIN WARY IN JORDAN-FEDAYEEN DISPUTE
The more extreme fedayeen
groups in Jordan appear to be tak-
ing precautions against another
brush with the King, a:nd are said
to be trying to rally additional
public support for their side.
All of the commando groups are
believed to have continued arming
private citizens, especially Pales-
tinians. The Habbash wing of the
Popular Front for the Liberation of
Palestine (PFLP~ is said to be or-
ganizing a militia divided into
groups of 12 to 15 men, each armed
with an automatic weapon.
On 12 March, representatives
of Fatah and the PFLP discussed the
recent agreement between the feda-
yeen organizations and the state.
Fatah apparently went along with
parts of the agreement, but the
PFLP rejected it entirely.
King Husayn, meanwhile, con-
tinues to talk about putting together
a more effective government. In
a conversation with the US ambassa-
dor on 24 March, the King implied
that he considers the present cabi-
net "abysmal," and said that a good
government is the key to control of
the fedayeen. Husayn stated that
the commandos were behaving "much
better" since the recent confronta-
tion, altho-ugh i-t would be necessary
to keep a careful eye on them. He
pointedly added that he would be
able to "deal conclusively" with
the fedayeen, should that rove
necessary.
ARAB DIL CONFERENCE ENDS ON MODERATE NOTE
The first Arab Petroleum Con-
gress since the Arab-Israeli war
of 1967 ended on an ur.~usually moder-
ate note in Kuwait this week.
Under the guidance both of
the Egyptians, who controlled the
meetings through sheer. numbers,
and of the Kuwaiti ho~~ts, the con-
gress offered something to everyone,
and stressed the priority of eco-
nomic interests over ~>olitical dif-
ferences.
The radical elemE~nts that have
disrupted past congresses were given
little more than token recognition.
The fedayeen representatives played
a quiet role, presumably because of
recent Kuwaiti financ_i.al contribu-
tions, and independent radicals
failed to turn the technical dis-
cussions into a political circus.
An at-tempt by one Libyan delegate
to toady to the Soviets was coun-
tered with a riposte by the Libyan
national oil company representative,
who asked when Eastern Europe would
be open to Arab oil sales.
The congress closed in an
atmosphere of calm unusual in
Arab conclaves. The Arabs' will-
ingness to strive for an accommo-
dation between oil producers and
Wes-tern consumers, even in a time
of political frustration, may thus
have reassured Western govern-
ments, oil men, and potential in-
ve stors .
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TWO OF INDIANS STATE GOVERNMENTS FALL
State governments in West
Bengal and the Punjab have fallen
in the past two weeks, and in
Kerala the ruling coalition has
narrowly avoided defeat on a vote
of confidence.
Rioting broke out in West
Bengal after the government fell
there, and order was restored un-
der "president's rule"--the admin-
istration of the state by the cen-
tral government. The rioting was
inspired mainly by the Communist
Party of India/Marxist (CPM), the
more radical of India?s two major
Communist parties. The CPM had
dominated the multiparty coalition
government that fell on 16 March.
In the Punjab, the coalition
government fell when the two fac-
tions of the chief minister's party
disagreed on the selection of
candidates for the upper house of
India's Parliament. Another fac-
tor, however, may have been dis-
satisfaction with the price in
both land and money the Punjab
will have to pay for the city of
Chandigarh, which was awarded to
the state last January. Chandi-
garh is now the joint capital of
the Punjab and Haryana.
In Kerala, a coalition led
by the more moderate Communist
Party of Sndia survived a vote
of confidence only because of
last-minute shifts by a handful
of deputies. The government is
still highly vulnerable, however,
to attacks by the CPM, which holds
the largest number of seats in
Kerala's state assembly.
In 1969, mid-term elections
were necessary to end president's
rule in both the Punjab and in
West Bengal. In the Punjab, where
both sides now claim a majority,
there is a good possibility that
a new, but probably unstable, gov-
ernment can be formed without re-
sorting to either president's
rule or new elections. At some
point, however, Prime Minister
Gandhi will probably have to call
elections in West Bengal. In
that event, it seems likely that 25X1
the CPM will strengthen its po-
sition there, which can only mean
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THE SOMALI REVOLUTION CREAKS ALONG
The Supreme Revolutionary
Council (SRC) has so far produced
meager results in its attempts to
act on the numerous problems it
inherited following the coup of
October 1969. Despite some ini-
tial popular enthusiasm, the mili-
tary regime has failed to win sig-
nificant support. The discontent
that has now developed throughout
Somalia could in times foster a
move against the regime by its
opponents.
Somalia's economy is in worse
shape than before thE: coup. There
is little hope that sufficient do-
mestic revenue will become avail-
able to get the economy moving,
and the outlook for foreign aid
is not much better. The govern-
ment's response thus far has been
to initiate harsh austerity meas-
ures, which in turn have only
heightened discontent in the busi-
ness community and among civil
servants who are to be dropped
from the government payroll.
Other sources of discontent
include the tribal groups, who
are unhappy at their loss of in-
fluence in the government and
in Somalia's highly tribalized
society. The focus of tribal
opposition now is centered in
highly volatile northern Somalia,
25X1 where there have been recent
signs of open opposition. Even
early student enthusiasm has
cooled considerably.
The SRC, in order to tighten
its control, has enacted unpopular
repressive measures that give it
virtually unlimited powers of de-
tention, trial, and punishment over
anyone suspected of opposition. All
private organizations, including
political parties, labor unions,
and youth groups, have been dis-
banded. Army and police officers
have replaced local civilian admin-
istrators, and suspect officers
have been posted away from Moga-
discio. Some special military
supervisors are already at work
in the ministries overseeing civil
servants.
For the time being, the SRC
does not appear to be in danger
of losing its grip.
25X1
The council itself
remains an enigma, however, and it
is un-clear exactly where the power
rests or where the council is head-
ing. After five months, General
Siad, the council president and head
of the government, has apparently
emerged somewhat stronger, but all
25 members seem still to be con-
cerned primarily with jockeying for
position. Major personnel changes
~ in the council are bound to come
and could produce a serious disar-
ray in view of prevailing faction-
alism and rivalries. 25X1
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Kidnapings of diplomats by terrorists made front pages in Latin
America this week. In the Dominican Republic the US Air Attache' was
seized by a Communist group that demanded the release of more than 20
prisoners in exchange. The Paraguayan consul in Corrientes Province,
Argentina, was kidnaped by the Argentine Liberation Front, a new extremist
organization. Ransom was set at two Argentine terrorists. Officials in other
countries have received threats.
As the tactic of kidnaping becomes standardized, the security services
are becoming increasingly reluctant to meet the ransom demands. In
Argentina, officials argue that President Stroessner of Paraguay often uses
consular posts to get political .enemies out of the country and might not
mind if Argentina refused to release the terrorists. In the Dominican Repub-
lic, the government balked at freeing the prisoners within the country, as
demanded by the kidnapers, and plans to fly them to Mexico. There is much
discontent at the working :level. among officers who must risk their lives to
capture terrorists only to see them set free. In Chile, where some diplomats
have been threatened, the government points out that the executive has no
power over prisoners and therefore could not approve their release. Prisoners
are in the custody of the judiciary, which would have to make the final
decision.
In Guatemala Carlos Arana was confirmed as president-elect by the
Congress. He is scheduled to take office on 1 July.
Black power protests in Trinidad are now focusing on the social and
economic inequities that plague most Caribbean countries. Prime Minister
Williams has attempted to defuse the continuing protests by aligning himself
with the movement's "legitimate demands," but he is still generally identi-
fied with the status quo. His predicament-how to maintain the stable image
that has appealed to investors and yet attract the support of the growing
black power movement-is becoming a common one for Caribbean leaders.
Williams, like others such as Prime Minister Pindling in the Bahamas, will
probably have to move toward a policy emphasizing economic nationalism,
in addition to ado ting the rhetoric of the movement.
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KIDNAPING OF US ATTACHE WILL ADD TO DOMINICAN UNREST
The kidnaping oi' the US
air attache on Tuesday will ag-
gravate the public order prob-
lems the government already
faces during this pre-election
period. Moreover, President
Balaguer's announcement on 25
March that he will seek a second
term in the election: on 16
May will further fue7L domestic
unrest.
The kidnapers are still
unidentified, but presumably
were affiliated with the Com-
munist Dominican Popular Move-
ment (MPD), the most activist
and terrorist-prone of the sev-
eral Communist factions. All of
the 20 prisoners on the ransom
list have been identified as mem-
bers of the MPD.
Despite the turmoil arising
from the kidnaping, president
Balaguer went ahead with his
announcement that he will seek
re-election. In an attempt to
head off opposition allegations
that he will not provide free
elections, Balaguer declared that
he will hand over the presidency
to the Supreme Court president dur-
ing the campaign. Balaguer ig-
nored the constitutional successor
to the presidency, Vice President
Lora, who has broken with Balaguer
and is seeking the presidency on
an opposition ticket.
In recent weeks, there have
been killings by both the Commu-
nists and the military, and con-
tinued civilian-police clashes.
Balaguer's long-awaited declara-
tion is expected to generate fur-
ther protests. The military, how-
ever, is probably more strongly
united than ever behind Balaguer
as a result of the President's
uncompromising refusal to bow to
the original demands of the kid-
napers to release the 20 prisoners
inside the country. Security
forces can be expected to deal
aggressively with any disturb-
ances.
EL SALVADOR - HONDURAS DEADLOCK CONTINUES
Continuing border incidents
and the inability of both coun-
tries to reach final agreement
on the establishment of a.de-
militarized zone have stalemated
bilateral and common market talks
for the past two months. If cur-
rent efforts to end the impasse
on troop withdrawals are success-
ful, however, the stage will be
set for resumption of negotia-
tions on normalizing relations.
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Although the spate of border
clashes does not derive from either
government's aggressive designs,
both sides have milked the inci-
dents for political advantage.
The Salvadoran Government capi-
talized on the incidents and on
its July "victory" over Honduras,
for example, during the campaign
for the congressional and munici-
pal elections on 8 March. With
the election out of the way,
however, the Salvadorans have
less incentive to keep tension
high and they now are ready to
resume negotiations.
Honduras apparently still
finds tension politically useful.
There is strong evidence that
President Lopez wants to con-
tinue in office despite con-
stitutional provisions forbid-
ding a second term, and he may
be trying to perpetuate an aura
of crisis in order to give him-
self an excuse to ignore the
constitution and avoid normal
presidential elections. The
mood of fear and uncertainty
that is spreading among the people
is not entirely of government
creation, however. The news
media have been playing up the
border clashes, and a signifi-
cant segment of Honduran offi-
cialdom, including government
leaders close to the President
and in the Foreign Ministry,
plus officers in the General
Staff, is persuaded that the Sal-
vadorans are planning another
invasion.
The Hondurans have refused
to continue formal negotiations
on bilateral or common market
matters until the border situa-
tion is defused. This makes
agreement on a demilitarized
zone a necessary first step.
Both sides have agreed in prin-
ciple to this step, but they
have not been able to agree on
details. The most important
sticking point is Salvador's re-
fusal to remove its National
Guard troops from border areas.
The Hondurans, remembering the
aggressive performance of this
well-disciplined, well-armed
force, have been unwilling to
accept the Salvadoran conten-
tion that the Guard merely ex-
ercises a police function. De-
spite differences, however, dis-
cussions are continuing.
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Secret
DIRECTORATE OF
INTELLIGENCE
WEEKLY SUMMARY
Sp eci ~ l Report
Venezuela's President Caldera - A Year of Frustration
Secret
N? 4 3
27 Maxch 1970
No. 0363/70B
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VENEZUELA'S PRESIDENT CALDERA-A YEAR OF FRUSTRATION
Rafael Caldera, Venezuela's first Social Christian president, is entering
the second year of his five-year term Having achieved little more than mere
survival. Hobbled from the start by a hostile opposition majority in Con-
gress, beset with persistent labor and student strife, and plagued by a sluggish
economy, he waged what amounted to a holding action. He has been guided
by pragmatism rather than by the vague and conflicting ideology of his
party, His early blunders in supporting labor's excessive demands were
somewhat counteracted by a tough stand toward labor at the end of the
year. He has followed established foreign policy lines in attempting to gain
access to the vital US market for Venezuelan oil and in promoting diplo-
matic links with European Communist nations, while at the same time
walking the Essequibo tightrope: pushing Venezuela's claims to more than
half of Guyana's territory by all means short of overt military actions.
Thanks partly to his year's experience and partly to a recent working
arrangement with the major opposition party of former president Leoni,
Caldera's prospects are somewhat brighter than during the first year. He will
have to overcome serious foreign and domestic problems, however, if he is to
silence the voices of military discontent that pose a persistent threat to his
government.
INTRODUCTION
On 12 December 1968, the day after he was
officially proclaimed the winner of Venezuela's
presidential election, Rafael Caldera Rodriguez
paid courtesy calls at the homes of the three
defeated candidates. He followed up these calls
quickly with consultations and meetings with a
variety of political, labor, and business leaders.
Caldera then went out of his way to visit the
military high command at the Ministry of De-
fense, to thank the military for their conduct
during the elections, and to say that he was sure
the military would always be firm supporters of
democratic institutions.
His vigorous activity and the stress he laid on
harmony, conciliation, unity, and the need to get
Special Report
on with the job of running the country were
consistent with the personality Caldera has dis-
played during his long participation in public life.
Beyond this, they reflect his appreciation of
Venezuelan political realities. Caldera won the
presidency with less than 30 percent of the votes
and with less than one percentage point more
than his nearest rival. In addition, it was the first
time in Venezuelan history that a freely elected
government had turned power over to the op-
position.
In addition to lacking a clear mandate,
Caldera had to contend with a Congress domi-
nated by the outgoing Democratic Action (AD)
party and with a burden of debts piled up by the
former administration. He also had to face a
long-standing insurgency and the perennial
27 March 1970
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student problem. Moreover, he was forced to de-
velop his policies under the watchful and sus-
picious eyes of the military establishment.
The President's own political vehicle, the
Social Christian party (COPED, is a well-or-
ganized political machine. Its ideology,-however,
ranges from the strident radicalism of the youth
wing to the practical moderation in the party's
governing councils. Its electoral program neces-
sarily was framed in vague terms and was distin-
guishable more in tone than in content from the
AD's well-established lines of moderate demo-
cratic reform. COPEI offered some dramatic tar-
gets, such as the building of 100,000 housing
units a year, but it primarily exploited the voters'
fatigue with the entrenched ways of the old gov-
ernment by stressing the need for honesty, effi-
ciency, and, above all, cambio (change).
POLITICS AS USUAL
Caldera's position as a minority president
called for caution on his part, and the position of
his party in Congress suggested that it would be
necessary for the new government to limit its
policy initiatives. His part; held only 31 percent
of the seats in the senate and 27 percent in the
chamber of deputies, whereas the AD held a plu-
rality in both houses. Moreover, the nine parties
represented in Congress made for a diversity of
forces and conflicting interests. The formation of
a coalition to support government legislation
would have been difficult in such circumstances,
and Caldera decided to go it alone. He announced
shortly after the elections that his government
would eschew formal political alliances and in-
stead would negotiate ad hoc arrangements with
the opposition depending upon the legislation un-
der consideration.
This policy of aloofness had its first test
when Congress opened in March. A coalition was
Special Report
hammered together for the election of congres-
sional officers, but the election took place only
alter four days of frantic politicking and bitter
wrangling, with COPEI's candidate emerging as
president. The coalition immediately ran into
trouble, however, when other parties boycotted
Congress, and nearly- two months passed before
any further business was transacted.
COPEI met a further congressional rebuff in
July when the party's request for borrowing au-
thority to cover government debt obligations was
defeated. The opposition backed a counterpro-
posal that drastically cut the administration's
original request. This bill and a judicial reform bill
aimed at limiting the President's power to make
patronage appointments were passed before Con-
gress adjourned for athree-month recess.
The second meeting of Congress, from Octo-
ber to December, was no more successful for the
government. The only significant piece of legisla-
tion, the budget, was passed 20 days after Con-
gress had been scheduled to adjourn. At that, it
had been shorn of any items in which COPEI had
a particular political interest. Thus, the first con-
gressional session ended without the enactment
into law of any important part of the COPEI
program. The executive and legislative branches
of government were stalemated. Caldera realized
that this situation could not be allowed to
I9I9: date of birth
F.ady 1930s: student leader against Gomez dic-
tatorship
Later 1930s: wrote Venezuela's first labor code
1941 to 1945: served in Congress
1945-46: Attorney General
1946: founded GOPEI
1948-58: opposed Perez Jimenez dictatorship
1958: ran for president, coming in third
1963: again ran for president and again lost
1968: elected president
c'aldera is widely respected for his honesty
and fur his courage in apposing dictatorship and
extremism, as well as fnr his intellectual ability.
Ilis advocacy of Christian Democratic Prin-
ciples is tempered by hie objectivity and realism.
27 March 1970
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continue, as there was increasing concern that the
impasse threatened the political, economic, and
institutional stability of the country.
As 1970 began, COPEI and AD worked out
an agreement for limited cooperation. The two
parties announced that they had reached an agree-
ment for organizing the 1970 session of Congress.
In private it was admitted that they had also
agreed to collaborate on specific items of legisla-
tion of basic national importance and of interest
to both parties. Both sides stressed, however, that
their' informal agreement was not a binding pact.
AD believes that a formal pact would be so un-
palatable as to split the party, and it has no desire
to be tainted with the government's failures.
COPEI does not wish to share the power of gov-
erning or to weaken its ideological position. In
spite of these hindrances to effective cooperation,
both parties apparently believed that some sort of
agreement was necessary to maintain stability. If
the two parties can reach agreement on specific
items of legislation, particularly on public works
programs, the 1970 session of Congress will prob-
ably be more productive than was that of 1969.
Almost simultaneously with Caldera's inau-
guration, a new force emerged on Venezuelan
campuses. Student unrest was led by anarchists
and independents rather than by the traditional
student leaders affiliated with political parties.
The most militant of the traditional leaders have
been the leftists, who have used the universities as
headquarters for armed rebellion against the gov-
ernment.
The new activists, although exhibiting a
strong Marxist cast, showed no interest in tradi-
tional politics. Instead, they directed their efforts
against the universities in a vague movement for
"academic renovation." They resorted to widc-
Special Report
spread violence in support of such demands as
abolition of entrance examinations, new school
buildings and facilities, and reformed curricula.
The traditional leaders, reacting to the threat
to their control over student affairs, struck back
by attempting to seize control of the movement.
The result was that throughout 1969 universities
across the nation were scenes of demonstrations,
clashes between students and authorities, clashes
between contending student factions, student
strikes, and outright closings. The tumult was
accompanied by considerable shedding of student
blood at the hands of both fellow students and of
government authorities.
Late in October, following four days of vio-
lence that included intermittent sniping and the
burning of vehicles, army troops occupied Central
University in Caracas. Since then there has been
no serious student disorder. Nevertheless, student
grievances remain. Charges of government repres-
sion, and, in particular, of abuse and even murder
by security agencies remain a live issue. Govern-
ment inattention to the academic renovation
movement can be expected eventually to result in
a renewal of the demands. In addition, proposals
for a university reform law, that would strip stu-
dents of some of their privileges are pending.
When these proposals are presented to Congress,
student reaction can be expected, making further
disorders likely.
President Caldera was also plagued during his
first year in office by difficulties posed by Vene-
zuela's powerful and highly politicized labor
movement, although this caused him less trouble
than the student problem.
The government early set about wooing
labor by showing partiality to labor groups as
opposed to management. Labor leaders pressed
their advantage, and by July labor strife was
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becoming common. In some instances the govern-
ment upheld strikes that were clearly illegal.
Twice, for example, unions were able to obtain
significant benefits by striking in disregard of
valid collective agreements. This trend culminated
in the first teachers' strike in Venezuelan history.
Once more the government gave way, and the
teachers gained virtually all their demands, includ-
ing asalary increase of 45 percent.
The increasing boldness of labor had an ad-
verse effect on the business community. The un-
ruliness of labor, coinciding with that of the stu-
dents and the stalemate in Congress, prompted
one executive to remark, "We do not have a
government," and other responsible observers
foresaw increased labor conflict.
'T'his prediction was borne out in early De-
cember when workers at the government-owned
steel rni11 in eastern Venezuela went on a wildcat
strike. The strike for the first time presented a
clear-cut challenge to governmental authority,
anal Caldera could not afford to appear weak. He
stated that the government would stand firm
against "irresponsible" strikes, and he arrested
several labor leaders and sent troops into the area.
'T'he strike was soon settled, but on terms that,
once again, were costly to the government.
Although the government's show of strength
in the steel strike may have had some deterrent
effect on labor leaders, the contract signed in
February between the oil companies and the pe-
troleum workers granted such favorable terms to
the workers that the government's initial firmness
may have been nullified.
In his inaugural address President Caldera
invited insurgents to abandon the armed struggle
and rejoin the Venezuelan community. So low
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Venezuelan Guerrilla Group
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had the guerrilla movement fallen since its
1963-64 heyday that Caldera could be confident
the guerrillas no longer posed a threat and that an
appeal to them might be effective.
A dissident group of the armed wing of the
Venezuelan Communist Party (PCV), the Armed
Forces of National Liberation (FALN) under the
leadership of Douglas Bravo, broke off from the
PCV in 1966 after the PCV had virtually aban-
doned guerrilla warfare. Independently, guerrillas
of the Movement of the Revolutionary Left
(MIR) also continued in the field. During the later
years of AD administration, the effectiveness of
these two groups continued to decline.
Caldera legalized the PCV as one of the first
steps in his pacification campaign. In addition to
removing one Communist group from all ties with
insurgency, the step was designed to have a di-
visive effect on other extremist opposition
groups. The government then announced that
guerrillas who abandoned their arms would re-
ceive amnesty, and it began talks, through inter-
mediaries, with the insurgent groups. The pacifi-
cation program, however, has not been successful
in ending insurgency or .in inducing significant
numbers of guerrillas to surrender, although it
may have had some divisive effect among the
guerrillas.
Still, insurgency continued to decline during
Caldera's first year in office. Sporadic attacks
continued and several military officers and en-
listed men lost their lives in ambushes, but no
significant urban terrorism took place, and the
guerrillas were unable to mount any sustained
campaigns. The continuing decline was probably
the result of a lack of foreign support, a lack of
popular support, a lack of visible progress or
success, and of squabbling over ideology and
strategy. Possibly 60 guerrillas remain active in
Bravo's FALN and 40 in the MIR, probably
slightly fewer than when Caldera took office.
Special Report - 5 -
The legal activities of the PCV have not
prospered either. The PCV is outflanked on the
left by a number of semilegal groups and by the
guerrillas, and on the right by the democratic
parties. The party is deeply divided among an old
guard principally preoccupied with loyalty to
Soviet orthodoxy and a group of rebels who want
to make the PCV a national party free of foreign
ties.
Despite the low state of insurgency and of
the Communist movement in Venezuela, the
Marxists maintain a limited potential for trouble-
making, especially by exerting pressure on the
government through attacks on military units.
The military are President Caldera's kib-
itzers, always looking over his shoulder, ever
ready to take his seat if he does not protect their
interests. Although the military have not inter-
vened directly in the government since 1958, the
existence of a strong military establishment with
a long history of intervention in government
poses a potential threat to the continued develop-
ment of civilian government. Since Caldera took
power, there have been numerous reports of mili-
tary discontent but no evidence of the meddling
in government activities that took place through-
out the AD's tenure in office.
The military have found much to complain
about. The legalization of the Communist Party
and the pacification program have been unpleas-
ant for them. Military units that have continued
to suffer casualties at the hands of die-hard guer-
rillas have been especially resentful. The lack of
promotions, the lack of a pay raise in spite of
inflationary pressures, pay raises granted to labor
unions, and a sharp cutback in military expendi-
tures have added to the military's discontent.
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C a l d e r a's minister o f defense, General
Garcia, is not well regarded by many military
officers. Outspoken criticism of him became so
serious in August that Caldera was obliged to
order the arrest of a number of officers, including
the former commanding general of the army, on
disciplinary grounds. The arrests stilled criticism
but left a residue of resentment.
Military discontent reached a peak in Octo-
ber as a result of labor strikes, increasingly violent
student demonstrations, a slixggish economy, and
the stalemate in Congress. Government occupa-
tion of two of the most troublesome universities
and the settling of labor disputes eased but did
not remove the problem. Caldera further at-
tempted to mollify the military by visiting several
military facilities in the Caracas area over the
Christmas holidays and by promoting 16 colonels
to general.
Nevertheless, in January the Ministry of De-
fense was sufficiently concerned to circulate a
message ordering officers on military duty to ab-
stain from participation in political matters.
The Venezuelan economy remains basically
strong, and the slowness of its growth in 1969
was probably largely the result of business uncer-
tainty over the political situation.
The rate of economic growth in 1969
slipped to four percent or less, as compared with
an annual average of five percent in the previous
five years. In addition to business caution, the
slow growth rate can be attributed in part to a
reduced level of government expenditures on ma-
jor investment projects because of the large public
debts incurred under the ,~D government and
because of Caldera's budget difficulties with Con-
gress.
Special Report
In coming months the performance of the
economy is expected to be especially sensitive to
political developments. If the AD-COPEI under-
standing produces legislative cooperation on mat-
ters such as a public works program, the business
community will probably proceed with its invest-
ment plans, thus contributing to an increase in
the rate of economic growth. Conversely, con-
tinued stalemate in congress or a renewal of stu-
dent or labor strife will probably result in con-
tinuing sluggishness of the economy.
Oil output, of decisive importance to the
economy, was slightly lower in 1969 than in
1968. Of greater concern to Venezuela than this
drop, however, is the question of the US oil
import policy. The government of Venezuela as-
pires to an assured position for its oil in the US
market and to a share in the increase in US
demand for fuels. Venezuela's anxiety concerning
its prospects in the US oil market has been eased
considerably as a result of conversations in Wash-
ington between US and Venezuelan officials and
of the import quota imposed by the US on
Canadian oil.
Caldera's foreign policies have reflected
broad national interests rather than ideological
interests or personal style. They have differed
only slightly from those of his predecessors. He
stresses a line of "independence," by which he
means negotiating with the U S as an equal, pref-
erably in a bloc with other Latin American na-
tions.
The overriding importance of oil has inevi-
tably cast Caldera's policies in the mold formed by
the Betancourt and Leoni administrations. De-
fense of Venezuela's position in the US oil market
was sharpened for Caldera, however, by the re-
view of the oil import policy of the US initiated
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by President Nixon. In late 1969 and early 1970
his government made urgent representations, Cal-
dera himself pleading Venezuela's case to US of-
ficials on several occasions. Favorable treatment
accorded a commission sent to Washington in
February and President Nixon's favorable state-
ments on Venezuelan oil have greatly eased Vene-
zuelan concern for the time being.
Caldera also continued negotiations begun
by the AD administration for the re-establishment
of diplomatic relations with the Soviet Union. His
government has proceeded realistically and with-
out haste with these negotiations for more than a
year, and relations now seem on the verge of
being re-established. Caldera is aware of the dan-
gers of a large Soviet presence in Venezuela and
has insisted on limiting it within the framework
of a formal agreement.
Caldera has not changed the previous ad-
ministration's policy toward Cuba, although rela-
tions have not been as acerbic as during the AD
period. Venezuela continues to express the hope
that Cuba can be reincorporated into the inter-
American system, but it insists that this can be
done only within the framework of the Organiza-
tion of American States and only after Cuba has
stopped intervening in the internal affairs of other
Latin American countries.
Caldera's most sensitive foreign relations is-
sue has stemmed from Venezuela's claim to the
Essequibo region of Guyana. In 1962 Venezuela
reasserted its claim to this region, alleging that the
award of the territory to Great Britain in 1899 by
an international tribunal was invalid because of
evidence of fraud that later came to light. In 1966
Venezuela and Great Britain, acting on behalf of
Guyana, which became independent that year,
agreed to meet regularly for four years. If at the
end of that time there had been no agreement,
the disputants would have three months to find a
.solution in other ways. Failing that, the case
would be referred to the United Nations Secre-
tary General.
After four years of fruitless discussions, the
Mixed Border Commission expired last month
with an agreement to delay submission of its
report for three months to allow a period of
direct negotiations between Venezuela and
Guyana. The first meeting under this agreement
was held on 10 March, but apparently little, if
any, substantive progress was made.
Venezuela has done more than talk to assert
its claim to the Essequibo. At the close of the AD
administration, Venezuela engineered an uprising
in the region. According to plan, Venezuela was
to heed the call of the native rebels for assistance.
When the United States became aware of the plan
and exerted diplomatic pressure on Venezuela,
the uprising failed because of the withdrawal of
Venezuelan support.
Venezuela did not lose interest in the Es-
sequibo, however. With President Caldera's bless-
ing, the military have been active along the bor-
der. Aroad has been built paralleling much of the
frontier, and since late 1969 a substantial troop
build-up has taken place. On several occasions
shots have been exchanged between Venezuelan
and Guyanese frontier troops.
Special Report _ ~
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Special Report - 8 - 27 March 1970
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The Venezuelan force on the frontier is
probably adequate to occupy key points in the
Essequibo region. There is no indication, how-
ever, that an invasion is imminent. President
Caldera probably prefers an aggressive but peace-
ful program of long-range penetration of the re-
gion. Joint Venezuelan-Guyanese economic devel-
opment of the region would be the essential ele-
ment in his program. There are, however, hawkish
elements, both civilian and military, who have
been pressing hard for a quicker, more direct
solution. If the direct negotiations now under
way with Guyana do not progress in favor of
Venezuela, Caldera may be forced to yield to the
hawks. This is the single issue most susceptible of
arousing nationalist emotion that could trigger a
coup.
Perhaps President Caldera's greatest achieve-
ment is having remained in office a full year. He
Special Report
has not brought about the cambio that was his
electoral promise. His pacification program has
not rnet with convincing success. His attempt to
woo labor was nearly disastrous. Economic
growth has not accelerated, and virtually none of
his legislative program has been passed by Con-
gress.
Yet, all is not dark. Caldera's foreign policy
has been moderately successful, and the ma-
chinery of government has been unspectacularly
but substantially reformed. The agreement with
AD should make possible the passage of at least a
part of Caldera's legislative program, although
compromise will undoubtedly weaken much of it.
If the coming session of Congress is indeed pro-
ductive and if the country is not faced with
serious student or labor problems, it is likely that
the tempo of economic activity will improve. In
these circumstances, the justification fora mili-
tary coup will disappear. If, at the same time,
Caldera is able to show substantial progress on the
Guyana problem, either through diplomatic or
military means, his stock will rise with the mili-
tary and with the country as a whole.
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